An Internship Report on

“Internal Audit Department of Citizens

Bank International, Thapathali”

Prepared by

Utsav Jung Bist

Submitted to:

Ace Institute of Management

Pokhara University

In partial fulfillment of the requirements for the degree of

Master of Business Administration

Kathmandu

Date: Dec 30th, 2013

i
 ACCREDITATION

It is hereby certified that this report, entitled

“Internal Audit Department of Citizens Bank International Limited”

Prepared by Mr. Utsav Jung Bist

Is an outcome of the 11 weeks internship undergone at

“Citizens Bank International Limited”.

The facts and ideas presented in this report are an outcome of the students’ hard work
and dedication to the project, undertaken as a partial fulfillment for requirements for
degree of

Masters of Business Administration

The outcome of this project has been highly appreciated.

…………………… .…………………..
Tulasi Raj Rijal External Evaluator
Supervisor Pokhara University
Internal Audit Department
Citizens Bank International Limited

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 ACKNOWLEDGEMENT
First of all I’m very grateful to Pokhara University for including internship program
as a three credit course as it has provided an opportunity to gain practical working
experience in the organization and also to college, Ace Institute of Management for its
support throughout the internship period as well as for the internship report
preparation.

I express my sincere gratitude towards Citizens Bank International Limited, for

providing me an opportunity to work in the organization.

My sincere gratitude to Mr. Tulasi Raj Rijal and all staff members of Internal Audit
Department for supervising and devoting their time from their busy schedule, to guide
me throughout the internship period. I am even thankful to them for providing me
with a wider perspective of functioning in a Private organization.

I express my sincere gratitude to Mr. Hari Gopal Rijal and all persons who have
contributed in the completion of this report. Lastly, my acknowledgement goes to my
friends and family members who have helped me and have been supportive while
writing this report.

Sincerely,
Utsav Jung Bist

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 LIST OF ACRONYMS

ABBS Any Branch Banking Service

AGM Annual General Meeting
AIM Ace Institute of Management
AML Anti Money Laundering
ATM Automated Teller Machine
BM Branch Manager
CA Credit Application
CAR Capital Adequacy Requirement
CBIL Citizens Bank International Limited
CBU Consumer Banking Unit
CCBU Corporate and Commercial Banking Unit
CCO Chief Credit Officer
CEO Chief Executive Officer
CPG Credit Policy Guidelines
HRD Human Resource Department
IAD Internal Audit Department
KYC Know Your Customer
LC Letter of Credit
LLP Loan Loss Provision
MBA Masters in Business Administration
NBA Non Banking Assets
NPA Non Performing Assets
NPR Nepalese Rupee
NRB Nepal Rastra Bank
PPG Product Paper Guidelines
PU Pokhara University
RM Relationship Manager
RO Relationship Officer
SME Small and Medium Enterprises
UCP Uniform Custom Practice

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 LIST OF TABLES AND FIGURES

LIST OF TABLES

No. Table Page

Table 1: Internal Audit Yearly Schedule 12

Table 2: Branch Operation Audit Checklist 13

LIST OF FIGURES

No. Figure Page

Figure I: Dissemination of Loan File Reviews 13

Figure II: The control mechanism of Organization Activities 15
Figure III: The Report Writing Process 20

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 EXECUTIVE SUMMARY
As partial fulfillment of MBA under Pokhara University I had chosen Citizens Bank
International Limited to do my internship program. The objective of this assignment was
to know about the corporate sector and to gain practical knowledge of the real workplace.
The internship was as for the period of 11 weeks starting from September 30, 2013 to
December 20, 2013. The 11 weeks of internship was fruitful to relate the theoretical aspect
to the real working environment.

During my internship I was assigned to Internal Audit Department of CBIL. The main
responsibility of IAD was to monitor the operation of the bank in regards to the
compliance with standards that has been set by NRB (Nepal Rastra Bank). The
commercial bank operations were just not restricted to deposit collection and lending but
more focused to service and customer satisfaction.

Reviewing the schedule that was a work plan for the audit department for a year and
making adjustments. Drafting report after audit; likewise producing comprehensive
quarterly report. Checking and reconciling the operating income and review of the loan file
were some task that I did during my Internship.

Risk factors were the most important one that had to be observed during audit, the risk was
observed in relation to operational, market financial and the fraudulent risk. The risk was
then to be noted and to be informed to the head of IAD so that changes could be made in
the Policy, Manual and guidelines. The IAD thus is a watchdog for the Bank; it addressed
the management on the breach of law and policy by the bank and alerted the bank on the
same.

I had a real life learning experience during my internship program. It has helped me lot to
develop professionals skills and personal development of my own. The internship made
me realize the difference in theory and practical and altogether the similarities where one
has to deal with contingencies and has to respond in real time environment. Opportunity
to develop my communication skills, report writing skills, negotiation skills and inter
personal skills were the qualities I developed during internship.

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 TABLE OF CONTENTS
ACCREDITATION ............................................................................................................................... I

ACKNOWLEDGEMENT .................................................................................................................. III

LIST OF ACRONYMS ........................................................................................................................IV

LIST OF TABLES AND FIGURES .................................................................................................... V

EXECUTIVE SUMMARY ..................................................................................................................VI

LIST OF TABLES ............................................................................................................................... V

LIST OF FIGURES .............................................................................................................................. V

CHAPTER ONE ..................................................................................................................................... 1

INTRODUCTION .................................................................................................................................. 1

1.1. ORIGIN OF THE REPORT ........................................................................................................... 1

1.2. OBJECTIVE OF THE REPORT ..................................................................................................... 1
1.2.1. PRIMARY OBJECTIVE ........................................................................................................... 1
1.2.2. SECONDARY OBJECTIVE ...................................................................................................... 1
1.3. DETAILS OF INTERNSHIP AT INTERNAL AUDIT DEPARTMENT, CBIL ....................................... 2
1.4. OVERVIEW OF CBIL ................................................................................................................ 2
1.4.1. CORPORATE PROFILE .......................................................................................................... 2
1.4.2. VISION................................................................................................................................. 3
1.4.3. MISSION .............................................................................................................................. 3
1.4.4. CORPORATE VALUES........................................................................................................... 3
1.4.5. OBJECTIVE OF THE BANK .................................................................................................... 3
1.4.6. CAPITAL STRUCTURE .......................................................................................................... 4
1.4.7. PRODUCT AND SERVICES ..................................................................................................... 4
1.5. ORGANIZATION CHART OF CBIL ............................................................................................. 7
1.6. AREA OF OPERATION AT CBIL’S IAD ..................................................................................... 8

CHAPTER TWO .................................................................................................................................. 14

ASSIGNMENTS/ACTIVITIES UNDERTAKEN ............................................................................. 14

2.1 ACTIVITY 1: POLICY, MANUAL AND GUIDELINE REVIEW AND UNDERSTANDING THE PROCESS
OF ACTIVITIES CARRIED OUT BY BANK ............................................................................................... 15

2.1.1. Introduction.................................................................................................................. 15
2.1.2. Procedure and my role in the assignment .................................................................... 16
2.1.3 Outcome of the assignment .......................................................................................... 16
2.1.4 Conclusion and Recommendation ................................................................................ 16
2.1.5 Learning from the Assignment ..................................................................................... 17
2.2 ACTIVITY 2: BRANCH AUDIT ................................................................................................. 17

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 2.2.1 Introduction.................................................................................................................. 17
2.2.2. Procedure and my role in the assignment .................................................................... 17
2.2.3. Outcome of the assignment .......................................................................................... 17
2.2.4 Conclusion and recommendation ................................................................................. 18
2.2.5 Learning for the assignment......................................................................................... 18
2.3 ACTIVITY 3: REPORT WRITING ON FINDINGS OF FACTS AND FIGURES .................................... 19
2.3.1. Introduction.................................................................................................................. 19
2.3.2 Procedure and My role in the assignment .................................................................... 20
2.3.3 Outcome of the assignment .......................................................................................... 20
2.3.4 Conclusion and Recommendation ................................................................................ 21
2.3.5 Learning from the assignment ...................................................................................... 21

CHAPTER THREE ............................................................................................................................. 23

PROGRAM WORKPLACE RELATIONSHIP ................................................................................ 23

CHAPTER FOUR ................................................................................................................................ 26

CONCLUSION ..................................................................................................................................... 26

BIBLIOGRAPHY ................................................................................................................................ 28

APPENDIX ........................................................................................................................................... 29

viii
 CHAPTER ONE

INTRODUCTION
1.1. Origin of the Report
This Internship Report has been prepared as a requirement for the completion of the
MBAe Program of Ace Institute of Management, Pokhara University.

Since the MBA program is an integrated set of practical and theoretical method of
learning, the students of this program are required to have practical exposure in any
kind of business organization as last term of this course. The primary goal of
internship is to provide an on-the-job exposure to the student and an opportunity for
translation of their theoretical conceptions in real life situation.

This report covers the topic “Internal Audit Department of Citizens Bank
International, Thapathali”.

1.2. Objective of the Report

The report focuses on two parts. They are:

1.2.1. Primary Objective

 The main objective of the report is to make an investigation on
the various functions done by Internal Audit Department of
CBIL.
 To incorporate theoretical knowledge into practice.
 To understand the nature of real life problems arising in the
organizational setting.
 To develop real managerial skills.
 To gain an experience to work independently to formulate
projects.
 To fulfill the partial requirements for the Masters of Business
Administration program of Pokhara University

1.2.2. Secondary Objective

 Identify the major strengths and weaknesses of the Internal Audit
Department at CBIL.

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  Provide probable solutions for the improvement on the risk and
compliance measures adopted by Internal Audit Department.

1.3. Details of Internship at Internal Audit Department, CBIL

Organization: Citizens Bank International Limited
Address: Thapathali, Kathmandu, Nepal
TEL: 01-4100588
Website: www.ctznbank.com
Position: Assistant
Department: Internal Audit Department
Working Duration: From 30 September to 20 December, 2013
Work Hours: Monday to Thursday – 09:30 AM to 5:00 PM
Friday – 09:00 AM to 01:30 PM

Name and Designation of Internship Supervisor at CBIL:

Mr. Tulasi Raj Rijal
Sr. Officer
Internal Audit Department-CBIL

Name and Designation of Internship Supervisor at Ace Institute of

Management:
Mr. Hari Gopal Rijal
Internship Coordinator
Ace Institute of Management

1.4. Overview of CBIL

1.4.1. Corporate Profile
Citizen Bank International Ltd is located at Sharada Sadan, Kamaladi, Kathmandu,
the heart of financial sector of the country where it started its operation from 2007. It
is promoted by eminent personalities/business and industrial houses and reputed
individual having high social standing. It is managed by a team of experienced
bankers and professionals.

2
 1.4.2. Vision
To be the leading bank known for its service excellence in the region.

1.4.3. Mission
To be a trustworthy partner for the progress of individuals and institutions by
designing, producing and delivering the best financial solutions. The Bank will
constantly strive to inculcate in its services five corporate values as follows:

1.4.4. Corporate Values

The corporate values governing CBIL's development and central purpose include the
following:
CBIL is committed to meet the financial needs of our customers and exceed their
expectations through innovative solutions. We promise to deliver customer centered
products and services par excellence. High standard of employees and corporate
governance sets us apart from rest of the banks. We believe in being accountable,
conducting business ethically and maintaining transparency. We are committed to
take social initiatives for the development of the nation.
CBIL operates in accordance with the highest standards in all relationships with
customers, suppliers, environment and the community. Citizens Bank fosters a
climate which encourages innovation and diligence amongst staff and rewards
accordingly.
The dedication, enthusiasm, commitment and collaborative spirit of the promoters of
the Bank have already reflected in the capital investment of the Bank.

1.4.5. Objective of the Bank

The objectives of this Bank which carries out financial transactions (banking
business), subject to the Nepal Rastra Bank Act 2058 (2001), the prevailing Banks
and Financial Institutions Law (BAFIA), the companies law and other prevailing
Nepal Law are.

 To provide standard and reliable financial services to the general public,

by protecting and promoting the rights and interests of the depositors and
shareholders of the Bank.

3
  To bring about such financial resources, from internal and external sources
required for the establishment, development, expansion and enhancement
of capability and productivity of agriculture, industry, service, trade and
other productive business which appears feasible from business viewpoint,
and so to make support for bringing about dynamism in the development
of industrial, trade and agricultural sectors of the country.
 To provide financial intermediary service through institutional investment
by integrating the capital scattered in the country and fair competition

1.4.6. Capital Structure

The Bank came into operation with an Authorized Capital of NPR 2 billion divided in
to 20,000,000 (twenty million) ordinary shares of Rs. 100 each and Paid-Up Capital
of NPR 0.56 billion divided in to 5,600,000 (five million six hundred million)
ordinary shares of Rs. 100 each. The bank has now Authorized Capital of NPR 5
billion divided in to 50,000,000 (fifty million) ordinary shares of Rs. 100 each and
Paid-Up capital of NPR 2.1 billion divided in to 21,018,400 (Twenty One Million
Eighteen Thousand Four Hundred) ordinary shares of Rs. 100 each.
Capital Structure of the Bank at present is as follows:

 Promoter Share Capital: NPR 1.47 billion (70%)

 Public Share Capital: NPR 0.63 billion (30%)
 Total paid up share Capital: NPR 2.1 billion

1.4.7. Product and Services

The Bank takes pride in being able to consistently introducing new and upgraded
services to its customers. Products and the services of the Bank have been broadly
classified as follows:

a. Deposit Products
b. Loan & Advances
c. Other Servies

4
Deposit Products

The bank has introduced various deposit products recognizing the various categories
of customers and their requirement. We enable valued customer with easy access to
their respective accounts through our 35 branch and 31 ATM network. Return in
deposit product is very competitive and reliable. Customers of all age group and of all
areas of the country are given services.

Loans & Advances Provided

Citizens Bank International Ltd. offers a variety of loan products and services
specially designed to meet the requirements of individuals as well as business houses.
CBIL follow a very prudent investment and lending policy with a view to ensuring
that depositors’ funds are not put to undue risk. In pursuit of this policy it follow
international best practices on credit risk management, liquidity risk management,
operating risk management and market risk management.

Corporate Loan
 Term Loan  Trust Receipt Loan
 Overdraft  Export Finance
 Working Capital Loan/Short Term Loan  Consortium Financing

Consumer Loan and other Products

 Citizens Equipment Loan  Term Loan
 Citizens Home Loan   Overdraft
 Citizens Auto Loan - New Private  Citizens Margin Lending
 Citizens Auto Loan - Used Private  Loan against first class Bank Guarantee 
 Citizens Auto Loan - New Commercial  Loan against Government Bond
 Citizens Auto Loan - Used Commercial Loan against Citizens Fixed Deposit Receipt
 Citizens Education Loan   Loan against FD Receipt of Other Banks
 Citizens Mortgage Loan  Citizens Gold Loan 
 Citizens Mortgaged OD (Personal OD)  Citizens Fast Track Loan 
 Citizens SME Loan

Other Services

 Facility of Cheque Book and ATM  SMS Banking

 Citizens ATM cum Debit Card   Swift Service

5
 Locker facility  Internet Banking
 365days Banking   Payment and deposit of other Banks
 ABBS facility

6
 1.5. Organization Chart of CBIL
BOARD
HUMAN RESOURCE OF
DIRECTORS
MANAGEMENT &
COMPENSATION
COMMITTEE
COMPANY SECRETARY
AUDIT COMMITTEE
CHIEF
EXECUTIVE RISK MANAGEMENT
OFFICER
COMMITTEE
INTERNAL AUDIT
RISK MANAGEMENT
DEPARTMENT

AGM/SM AGM/SM AGM/SM

CREDIT RISK/RECOVERY
CREDIT AND GERENRL OVERALL INFORMATION OPERATION
MARKETING ADMINISTRATION FINANCE TECHNOLOGY

CREDIT RISK RECOVERY HUMAN GENERA LEGAL

CORPORATE CONSUMER
RESOURC L TREASURY CARD REMITTANCE
CREDIT BANKING &
E SERVICE FRONT
BANKING UNIT SHARE
CORPORATE CONSUMER OFFICE/
UNIT / SME INCLUDING /FINANC
CREDIT BANKING AGENCY
FAST TRACK E
BANKING UNIT BRANCH
LOAN
UNIT/SME INCLUDING Fig 1.1: Organization Chart of CBIL COORDINATION
FAST TRACK CELL
LOAN
CORPORATE CONSUMER BANKING
CREDIT UNIT INCLUDING FAST
BANKING TRACK LOAN
UNIT/SME
7
1.6. Area of Operation at CBIL’s IAD

Internal Audit Department (IAD)

 Background:
There are no hard and fast rules to establish an Internal Audit Department, but the
bank has structured the department for better supervision of the departments and
branches that it has. The IAD is responsible for monitoring the banking operation
within the bank in framework to the NRB rules/regulation, likewise also compliance
with BASEL II, Company Act 63, IFRS and many guideline and Act governing the
Banking operations. The IAD does a comprehensive Audit of the various departments
in regards to the Manual, Product Papers and Internal Guidelines prepared by the
departments itself.

 Structure of the Department:

As per organizational chart of the Bank, the departments’ responsibility is to
communicate the findings and facts directly to the Audit Committee of the Bank. The
Audit Committee comprises of the Members of Boards, which consist of at least three
people as to the company Act 2063.

IAD is responsible for independent analysis of banking operations done by the

management. CEO is sole responsible for the banking management hence the reply of
any IAD comment and findings are replied by the management through CEO.

 Responsibility of IAD:
The main responsibility of IAD is to examine the risk and compliance from different
perspective and to look after the adherence to written Acts and Guideline. Other
responsibilities are;
 Critical analysis of all Credit Applications (CAs) generated from various
business units (Branches and Corporate Office).
 Review of all new loan files and renewal of the loan files, and observe
risk in terms of legal aspect, financial aspect, and client situation aspect.
 Conduct site visit of business/stocks/collaterals to verify status of
business operation and stock level and collateral marketability in

8
 coordination with the concerned RM/ Branches and /or independently, if
required.
 Update and change clauses in CPG if changes needed to be done to avert
risk. Likewise update and change if clause in CPG is impractical in
reality to be implemented.
 Scrutinize all the new account head created and are observed if the link
with the accounting software is done properly. IAD mainly observes the
Assets and Liability link of the new account heads.
 IAD audits the HRD, Treasury Department, and Remittance Department
on yearly basis and submits the finding and facts needed to be changed
or rectified to the Audit Committee.
 Visit every 34 Branch on yearly basis for comprehensive audit, and rates
the branch Outstanding, Fair or Good as to its performance.
 Review the banking performance as to the budgeted figures prepared by
the management and review the actually performance and updated the
Audit Committee and Bank Management of the deviation found.
 Review the LLP, NPA and NBA of the Bank and matches it with the real
figures published by the bank so to know if the figures are authentic.
 IAD is not authorized to make direct dealing with any customer.

 Authority level & Work flow:

The IAD is an independent department from the management. Its reporting body is
the BOD through Audit Committee.

The Internal Reference Material for Audit:

There are various reference materials where every auditor in the IAD has to review
before carrying out a comprehensive audit. The frequently used and reviewed
reference materials by the Auditors are:
Finance Department
 Financial bylaw
 Management Information Systems (MIS) Maintenance and reporting
requirement
 Disclosure Policy

9
Human Resource Department
 Employee bylaw
 Code of conduct for staff
General Service Department
 Vehicle Usage and Maintenance Guidelines
 Fixed Assets Management & Physical verification guidelines
 Guidelines for Managing Physical Security
Operations Department
 Operational Risk Management Framework
 Operation Manual
 Trade & Credit Operation guideline
 Branchless Banking Manual
Systems Department
 System Manual
 Disaster Recovery Plan
 Outsourcing Policy
Treasury Department
 Treasury Operation Manual
 Investment and Forward Exchange Policy
Credit Department
 Credit Policy Guidelines
 Product Papers Guidelines
The auditors need to be updated on the reference material as it can changes as
according to the needs and proper adjustment that takes place. There also is a
provision for the policy to change every year, hence auditors are to be aware about the
changes made in the Policy and Product Papers.

The IAD yearly schedule:

The audit covers it work as to the schedule passed and approved from the Audit
Committee.

S.N Branch /Dept. Last year Audit Rating Audit Schedule for F.Y 20670-2071 Days
1 Kamaladi Fair October 2013 3
Branch/Corporate Office

10
 a Corporate Credit Good January - February 2014 15
b CBU Good January - February 2014 15
c Finance Fair towards Good April - May 2014 15
d Treasury Fair towards Good April - May 2014 4
e HR Good April - May 2014 4
f GSD Fair April - May 2014 4
g Trade & Credit Operation Good towards July - August 2013 25
h Card Good
Outstanding April - May 2014 4
i IT Good April - May 2014 5
j Remittance N/A April - May 2014 5
2 Nepalgunj Branch Fair November - December 2013 3
3 Newroad Branch Fair towards Good August 2013 4
4 Koteshwor Branch Good towards August 2013 5
5 Bouddha Branch Good towards
Outstanding September 2013 3
6 Birgunj Branch Good
Outstanding September 2013 4
7 Biratnagar Branch Fair towards Good November - December 2013 4
8 Kumaripati Branch Good August 2013 3
9 Pokhara Branch Good October 2013 3
10 Kalanki Branch Fair January - February 2014 2
11 Narayanghat Branch Good October 2013 2
12 Butwal Branch Fair towards Good October 2013 2
13 Dhangadhi Branch Good November - December 2013 2
14 Birtamod Branch Fair towards Good November - December 2013 2
15 Nayabazar Branch Good March 2014 2
16 Thahiti Branch Good towards January - February 2014 2
17 Maitidevi Branch FairOutstanding
towards Good September 2013 3
18 Kapan Branch Good towards March 2014 2
19 Maharajgunj FairOutstanding
towards Good January - February 2014 2
20 Beni Branch
(Narayangopal Good October 2013 2
21 Gaighat Branch
Chowk)Branch Good November - December 2013 2
22 Ghorahi Branch Good November - December 2013 2
23 Kirtipur Branch Good June 2014 2
24 Madhyapur Thimi Good March 2014 2
25 Pathlaiya Branch
Branch Good September 2013 2
26 Mahendranagar Branch Fair towards Good November - December 2013 2
27 Simikot Branch, Humla N/A November - December 2013 2
28 Charikot Branch Fair towards Good November - December 2013 2
29 Itahari Branch Fair towards Good November - December 2013 2
30 Bhaktpur Branch Good January - February 2014 2
31 Janakpur Branch Fair towards Good January - February 2014 2
32 Patan Branch Good June 2014 2
33 Surkhet Branch N/A November - December 2013 2
35 Hetuda Branch N/A September 2013 2
Total Audit days 179
Total Travel Day 38
Report Writing 43
Total Holidays 83

11
 Pro Strike Days (Election) 20
Total no of Planned Days 365
Remaining Days 0

Table 1: Internal Audit Yearly Schedule

The IAD check list for Branches:

All together there are 9 Departments and 37 branches till date where 2 Branches were
added during this year. The IAD has a checklist to audit Branch operation where
branch work is differentiated into Credit and Operations Department. The checklist of
operations department of a Branch in general would be;

BRANCH AUDIT
S.N. Particulars Status
Cash & Transfer
1 Batch Review (transaction list check)
2 Good for Payment record, system print, charge and monthly reporting
3 Cash Verification on Vault and Teller (Evening and Day Both) with note tags.
4 ABBS Charge of cash and Clearing transaction
5 Cash Give and Take Register Teller to Teller
Remittance and clearing department
1 FC Purchase/Sale
2 TC Purchase/Sale
3 FC Deposited in FCY Account
4 Draft Issue/Cancellation/Repurchase
5 Swift/Telex transfer
Customer Service Department
1 Account Opening LCY forms and register(with KYC filled)
2 Account Opening FCY forms and register(with KYC filled)
3 Interest Rate on Call Account and changes time and approval
4 Account Closing register, application and charges
5 Issue of Balance Certificate application, duplicate copy and charge
GSD & Accounts
1 Maintenance of FA Register & Coding
2 Branch Expenses
3 Maintenance of Vehicle(vehicle usage) & Generator Log Book
4 Petty Cash Verification
5 Stock Maintenance (Finance By law Chapter 9)

12
 Table 2: Branch Operation Audit Checklist

The IAD Loan Review:

The Branch/Loan Department facilitates the Customer with credit loan facility where
the loan file is firstly initiated by the Branch CCBU, CBU and is forwarded to the
head and is forwarded to the Credit Risk Department for review and approval. Thus
lastly the audit reviews the file for any risk on loan, documentation and process
deficiency in the loan file that could have been missed during review.

Loan File at last is reviewed by

Internal Audit from first to last stage of disseminationof
Loan File

Loan Approved By Loan Approved By

HCR - CBU, HCR - CCBU HCBU Loan Initiating Point
HSOV by CCRRO CCBU Branches/CBU/CCBU
Forwarded to initiating point for HSOV by CCO & Forwarded for Recommend for
implementation risk approval Approval

Figure I: Dissemination of Loan File Reviews I

13
 CHAPTER TWO

ASSIGNMENTS/ACTIVITIES UNDERTAKEN

The bank is an intermediary in the financial market, where it collects deposit from the
depositor and lends the same money to the business houses and consumers. The bank
makes a financial product that helps the business houses and the consumer to fulfill
their financial needs. In carrying out such transaction by the bank, bank has to make
safe and risk free transaction so that it would be protecting the depositors money that
it holds and likewise lend to the trustworthy and sound business houses and
consumers. The bank wouldn’t know the future risk that could be arising in the
process during the collecting and lending of the money from the market, where in
general it would be simply following the laws and acts to the inland laws to avoid
risk. Bank faces various risks like operational risk, internal staff risk, procedural and
process risk, which needs to be observed and tried to be mitigated during the fiscal
year. The bank if doesn’t review its operations there are chances for lapse in the
procedure and process which could lead forward to various risks.

The IAD acts like a watchdog and tries to alert the management on any deviation that
the management would make while focusing a lot to generate more profit and income.
The risks are enormous and couldn’t be traced by the management. There are news
about bank robbery, ATM fraud, Loan against fixed deposit fraud, misutilization of
loan by customer which mostly arise due to poor documentation process and likewise
lack of systematic processing of documentation.

So, it is important that the bank management is timely alerted for any default in the
process of operations. I have been working for Internal Audit Department since last
two and half years. The major focus of Internal Audit Department as of now is to do a
lively audit of bank operations and also to provide timely reports to the concerned
authorities for constant monitoring of the deposits diversifications, investment and
lending already booked and continuous update of the sector wise lending, investment
and its performance.

The major activities that I performed during the 11 weeks of internship period are
listed below;

14
2.1 Activity 1: Policy, Manual and Guideline Review and understanding
the process of activities carried out by Bank

2.1.1. Introduction

Auditing of the Bank is done throughout the year; they are there to alert the
management for any deviation from the NRB framework likewise loopholes that are
there in the policy and procedure are highlighted as IAD constantly monitor the work
and reports to the BOD for changes to be made. IAD reviews the Income and
recognizes it if not taken and realized. There is a period research conducted by the
IAD where data are collected and examined for recommendation, the research in
general will look at the secondary data’s rather than primary ones.

There are various forms of Audit carried out in any commercial banks. The first audit
is the self audit, and then secondly there are another department like Credit Risk
Department and Risk Management that constantly monitors the work. If any of the
risks is overlooked by the Credit and Risk Management Department than the last
department to control and alert the organization management is the Internal Audit
Department of the Organization.

Self Audit is done by BM and Department Head of

their own work

The Risk Management monitiors the Operational

Risk. The Credit Risk Departments Monitiors the
Loan Risk

The Internal Audit Department mointors the Risk

overlooked

The NRB controls the organization activities and

mointors the activities

Figure II: The control mechanism of Organization Activities

15
 2.1.2. Procedure and my role in the assignment
Since I started my internship during the month of Ashwin (First quarter end), the
major focus during that period was on studying on every policy and guideline of the
bank and also the NRB directives and matched between the two. The bank needs to
develop its manual and policy in line adjusting to the NRB Directives. The difference
and non relevancy were tried to be found out. As the bank in each year updated its
policy and manual there wasn’t any irrelevance clauses and points different form
NRB directive found in the policy and guidelines.

When going through all the manual, guidelines and policy I came to know the overall
job carried out within the bank. As for every work and chores carried out in the Bank
there are manual for it where policy and guidelines governs it, directing the employee
to let know of the do and don’ts.

2.1.3 Outcome of the assignment

I learned the various operations carried out by the bank and the procedure that the
department and branches followed in carrying out those operations. The guideline and
manual was well instated there for the bank, so as to carry out certain activity. Like
for example a certain criteria was to be followed in order to open up a saving account,
call account etc. If any of the procedure was missed during conducting of the activity
(account Opening) then there would be a high chance of error / risk due to improper
follow of the procedure. So each activities carried out in the Bank has to follow
specific procedure, where these procedure were predefined so as to avert risk like
fraud, operational risk, market risk, financial risk and the future risk.

2.1.4 Conclusion and Recommendation

If any new incumbent goes to a new organization and isn’t clear about the ideas of the
activities carried out by the various department of the organization that are
established, then it is better to go through the manual and guidelines which will give
some idea. The manual and policy is designed and are well in state for most of the
bigger and formalized organization. For the smooth functioning of the operations and
avert risk and have a control mechanism the manuals guidelines and policy are
designed.

16
 2.1.5 Learning from the Assignment
I learned the format to draft policy and guideline. These are working papers and are
the principles for conducting any activity in the organization, hence word to word
with line by line in the paper gives a direction, hence when drafting any policy and
guideline; it should be clear what it is addressing to and what meaning does it gives to
the followers. The heading and subheading in the working papers are like law’s
section and subsections for the organization.

2.2 Activity 2: Branch Audit

2.2.1 Introduction
The Audit of Branch was divided into two parts Operation of Branch and Loan
Exposure. The branch were centralized for distribution of the loan where the file is
first initiated by the branch but limit sanctioned and security document are all
approved by the head office. The branch audit was carried out with two persons at a
time where I was first given to audit the operations of the branch. The operation of the
Branch was divided as to Cash, Remittance, Customer Service and Administration.

2.2.2. Procedure and my role in the assignment

A specific checklist was given, as to which the documents were observed and was
crossed checked as to the checklist. The documents were all not observed but a
sample was first made as to it the operations document were audited on sampling
basis.

All the observations found were to be filed and was annexed properly so as for the
future reference. The total days required to audit a normal transaction branch was 2
days. The normal transaction is the number of customer flow per day in the branch
which is around 150 customers on an average.

2.2.3. Outcome of the assignment

The findings and facts were the outcomes of audit and these finding and figure were
stated as comments by IAD. The comments showed the work done by the IAD. I had
at first enlisted many comments at first but I later found that the comments that I
found were dealing with the compliance of procedures, as my comments only focused
on errors made by the branches. I then learned that the IAD had a big challenge, a

17
challenge to contribution in developing mechanism that controlled high errors during
work find out loop holes in the procedure for activities and monitor branches
performance.

2.2.4 Conclusion and recommendation

The IAD actually monitors the compliance and also the risk of activities carried out
by the bank, it truly keeps the activities carried out to be safe and is trust worthy as
auditors frequently and reputedly checks the operations. The Internal Audit in some
way keeps the staff of the organization in discipline and also makes them feel that
their works are being crossed checked.

The IAD when goes to do audit in the branch it is approved with less working days
where IAD wouldn’t and can’t do a comprehensive audit of the branch within a short
period of time. There are specific areas of concern for the department where it has to
focus for audit. Some of the areas of concern for audit are that there are chances for
collateral kept for security to be different than that which could be presented in the
loan document, also loans taken for working capital would not be appropriately used
and hence the inventories wouldn’t increase as to the injection of working capital
loans, thus filed visit for such cases can’t be carried out properly. The IAD has to
assign specific personnel to observe such cases separately.

2.2.5 Learning for the assignment

The loans sanctioned to the customer are of various types where the customer may
pay principle and interest amount in EMI basis. Likewise there are also revolving
nature loans where customer can only pay the interest of the loan amount used and
renew the loan after a year. Likewise branch also facilitates the customer with short
term loan and Personal loans. The main job for the auditors is to read the CA of the
loan doing so, the information of the file would first be understood then a rough idea
would be generated, where we then understand what are the main documents required
in the file. Then we audit the file accordingly if it is legally intact, financial sound,
and collaterally safe to cover the future risk.

A simple checklist for the Private Vehicle Loan customer was as like

18
 1. Is the loan customer below 58 years
2. Is the customer salaried staff
3. Is the customer Net salary after personal expense enough to cover the
interest
4. Is the branch funding 70% of the vehicle Tax invoice
5. Has the Vehicle been register in the name of the brank after loan
disbursement?

A discussion is to be done with the BM/Department heads about the audit Findings.
During the process the previous audit comment compliance and also the audit
comments of External and Statutory are discussed. In the discussion the problems of
the branch are noted down, so as to resolve it taking the problems to the concerned
authority, also the deficiency of the branches in terms of Human Resource, Training
required for Employee are also discussed.

The audit comments on the operations and loan documents are then and there given to
the BM/Department head so as for quick rectification of the errors. The IAD does so
as to cover up the errors and incomplete documents, which wouldn’t be aging found
by the external and Statutory Audit.

2.3 Activity 3: Report writing on findings of facts and figures

2.3.1. Introduction
The Report is first drafted where audit findings are highlighted, this report is a
preliminary report where the replies for each comment are to be addressed by the
BM/Departments head. The audit report was very seriously taken form improvement
by the concerned authority. The senior executives had to reply if serious issued was
raised in the report. Therefore the communication of the situation of management was
report through the report to the BOD, and the executives of the Bank.

The audit team has a specific format to write a report where every auditor has to
follow the same. The report has a cover page where the names along with the
designation of the employee are written who receive the report, likewise is has the
executive summary and highlights serious and routine issues under different headings.

19
 Report Writing

Recheck on Drafting findings

Rectification and facts

Reply on
retification done for
findings and facts

Figure III: The Report Writing Process

2.3.2 Procedure and My role in the assignment

The report writing was a time consuming duty of the auditors as there was three phase
in the finalization of the report. The report was first roughly drafted, then it was sent
for the reply from the concerned department, later the reply was crossed checked,
whether it was really executed by the Head of Department /Branches, later if every
comments that where rectified by the concerned authority then the report was
finalized to be sent to the Audit Committee meeting for discussion about the
Department / Branch performance.

The report highlights the financial situation of the Branches which I mostly prepared
all from dumping from the “Pumori” which is the banking software used by CIBL

2.3.3 Outcome of the assignment

The report writing skill was developed as I understood that a good sketched report
didn’t need to be re-addressed the findings and facts verbally; the report would just
speak for itself. The presentation of finding and figures in a report should done
addressed where management would know come to know what exactly is happing in
their organization. The report that I had written was reviewed by the senior executive
member of the organization, therefore I had to concentrate on making the writing
simple and specific.

20
 2.3.4 Conclusion and Recommendation
The Bank has a check and balance procedure in every step, the Branch/ Department
head self audit its work in a certain period of time to observe the errors and mistakes
that would occur in the working procedure, secondly the Risk Department a
department formed few year back monitor risk factors that would occur in the
working procedure. The Credit Risk department also does an audit on the loan files
and reviews the authenticity of the loan files and finally any cases that are overlooked
by the self audit, Risk Department and Credit Risk department it is then reviewed by
the Internal Audit department, hence there is a check and balance system within the
bank in every steps. This is the reason banking sector in Nepal is most transparent
industry.

Despite the monitoring Department established in every step there are frequent fraud
cases that are heard in the market. The issues are mostly because of the internal staff
involvement in the fraud cases which can’t be traced by looking at the
documentations and the working process procedures. As the internal fraud cases are to
be handled and addressed seriously, separate Auditors are to be deployed to study the
policy and procedure that are there in place for execution of work and the loop holes
in these policy and procedure for internal frauds are traced and noted easily.

The Internal Audit Department has a huge scope which it needs to audit, the auditing
of Finance, Human Resource, Information Technology, Treasury and Investment,
Research and Development department are done throughout the year, hence different
sector specialized personnel and personnel’s of diversified education background
people needs to be deployed in the department so that the department would be more
stronger and well equipped. The bank has till date deployed 6 Chartered Accountants
in the IAD.

2.3.5 Learning from the assignment

The assignments that I had undertaken were challenging and demanded high level of
reporting, communication and negotiation skills. Some of the general learning from
the assignment is;

 The importance of policy and guidelines drafting for every manual work
 There is less risk in diversified deposit than a concentrated and huge deposits

21
  The Bank needs to maintain to the Capital Adequacy for Lending
 Impact (in volume) of NPA accounts on performance of the bank.
 Procedure for recovering past due loans.
 Legal considerations on lending and diseased deposit accounts settlement.
 Communication and negotiation skills for dealing with both executive
members and lower level employee.
 Effective reporting for proper decision making.
 Making customized report for effective decision making.

Performance of the staffs at IAD is dependent on the finding of the new risk zone in
operations and loan likewise self updating on the NRB directives and Circulars is
another challenging task. IAD tries to find new prone areas and loop holes in the
process when carrying a transaction, be it lending or collecting deposit. It also has to
study every details of the process and find the loop hole that might not be visible for
the management. So, the efforts made and performance of staffs of IAD should not be
entirely done in quantitative basis. Their performance should also be judged on
qualitative basis.

Making reports as per the prescribed format and sometimes as demanded by the
concerned authorities generally does not present many difficulties. But handling of
specific audit is a very tough job to undertake. At most of the times before audit one
needs to be well prepared and show know the total procedure undertaken for that
specific operation, So in such cases effective communication with the staff is to be
made where we need to put him/her in the comfort zone, else there are chances that
he/she can hide many things during the communication.

22
 CHAPTER THREE

PROGRAM WORKPLACE RELATIONSHIP

Internship program is held by Ace Institute of Management under the authorization of

Pokhara University as partial fulfillment of the MBAe course. The objective behind
conducting the internship program is to introduce students to the real work life
situation and blend the theoretical knowledge to practical experience.

During the first few days, it was bit difficult for me to get comfortable to the working
environment in the new department. But later I slowly got accustomed to it. Working
with the staffs of Internal Audit Department was a real good learning experience and
enjoyable too as I came and meet people of different background. It was because of
the tasks involved and co-ordination for works in the department.

Apart from this I also got to learn about the importance of relationship, value of time,
sincerity, honesty, dedication, helping attitude to work successfully in the
organization. During the internship while working and contacting with different
individuals of various background, I came to know about the importance of
interpersonal skill, communication skills and decision making skills in working as an
individual. This all helped me to know about my potentiality/weaknesses as well.

The staffs of CBIL were very helpful and taught me different activities involved in
Banking. I noticed that the staffs were very polite to each other and extended their
help and cooperation, no matter which department they belonged to. My experience
with IAD has been equally impressive as senior staffs never got annoyed or tired in
spite of mine repeating inquiries and questions. However time management was a
major concern in IAD.

As a whole, I found internship program very useful for me. Within the eight weeks, I
was able to understand about the working culture of organization. This even
highlighted me about the difference between the theoretical and practical part of
working in the organization.

The Courses that have conducted at Ace Institute of Management has highly helped
me to learn about different skills, techniques. I have applied the academic knowledge

23
in practical work scenario and also applied in preparing this report in the following
ways:

Organization Behavior and Leadership

This course has helped me to understand the basic principles of human behavior that
effective managers use when managing individuals and groups in organizations. I
came to identify that the management of complex organizations requires an
understanding of the nature of human behavior in corporate and other organizations,
styles of motivations, company leadership, power and authority, strategies of
organizational design and change, teamwork and collaboration, and the measurement
of organizational effectiveness. During my visit to various Branches I came across
different management style and I made a rational understanding that it was because of
the Branch Manager Leadership style and quality.

Managerial Communication

I came to know that if the management is well established and formalized the
employee would be well directed and addressed to what there are doing and where
they are heading. Human skills and ability to work well with other people both
individually and in a group helps and individual to well fit in any management which
I felt during my work in the organization. Communication skills and interpersonal
skill helped me a lot to effectively work with people. Basically, I was able to explore
the basic concepts and processes of management that included of functional roles and
processes of planning, leading, organizing, and controlling comprising the manager
role. Hence, it also aided me to develop skills related to the manager function and
required in today’s competitive environment. I was also involved in writing memos,
letters and reports. Knowledge of this subject was not only just helpful related to my
work/assignments completion but also aided to form good relationship with everyone
in the organization

24
Management Information System

I was delighted to be aware of the various technologies used for the communication
and decision making that I had garnished from my MIS classes’. At CBIL, most of the
time I work in the system where I had to dump data from the SQL server of the bank.
I learned to fed query to dump the desired information directly to excel sheet and
work on it. I quickly learned to use the banking software that the bank was using.

Financial Institutions and Markets

This course actually assisted me a lot to complete my assignments during the

internship period, as I constantly was working on the financial numbers of the bank.
The course had actually given an insight into operations at bank. Knowledge of
Finance and Marketing and its occurrence, impact and management was taught in the
course. During my internship period, I had a clear picture on what should be the
gravity of focus for working capital management, time value of money, and equity,
capital and investment.

Portfolio Management and Security Analysis

The NRB had directed commercial banks to lend and invest on specific sector with
predetermined limit, likewise NRB also directed on the maintenance of the Capital
Adequacy Ratio at 10%. It was a challenge for the bank to maintain the limit and
CAR as it was directly related to deposit collection Banks equity and total lending and
investment. The course had taught us to create portfolio and manage the portfolio. In
CBIL, I was assigned to observe the Loan Loss Provision and the CAR prepration and
financial review of each quarter.

This is what I experienced from skills, knowledge of the staffs in the IAD and CBIL
as a whole and by doing the assignments that was given to me during the 11 weeks
period. So, from my internship I have learnt the importance of time management,
professionalism, adaptability to the changing situation, communication & negotiation
skills and report writing & presentation skills. Hence, overall the experience was good
and a real contributor for my career in the future.

25
 CHAPTER FOUR

CONCLUSION
In general I had a very good experience at CBIL during my two month internship
duration. CBIL has built a good image in Nepalese market, especially with its
devotion to good corporate governance and NRB compliance. The internship did not
just provided me with the opportunity to be a part of CBIL and learn its work
activities for my career, but also helped me to identify my strengths and potentiality
as a part of personal development.

At the same time, I also had good impression from all members of Internal Audit
Department at CBIL. I also noticed all staffs being much disciplined and punctual in
their duties. Further having seen the relationship, corporation, friendly and helping
attitude among the members of CBIL; it created a cheerful relationship where anyone
would enjoy working

The term of two months of Internship, paved a way to learn new and specific things
about the institute. Along with this, it opened the door towards taking the initiation to
handle some specific projects that were challenging enough. I have specialized in the
course Human Resource Management where there were many courses that
enlightened me with the activities, performance undertaken in Internal Audit
Department in any organization. But, it just gave me a theoretical concept. While at
CBIL, I actually encountered it and learnt from it.

Those assignments that I was given was a challenging one where I had to prepare and
present various reports understanding the policy and guideline of the banking sector,
which helped me to use my knowledge of Managerial Communication course. In a
way these activities helped me to polish my communication, negotiation, report-
writing and managerial skills, show the level of formality practiced in the
organization and adapt to the working environment.

Overall, CBIL acknowledged my performance during the internship period. In the

beginning, though the interval of two month seemed to be long, but with the
assignments, observation made in the CBIL, time was properly managed for learning
as well as observation part.

26
Therefore, the working environment provided by CBIL always encouraged me to
perform well and show my ability and capability though my work. As a whole, CBIL
experience will always be a proactive part that contributed a lot in my learning for
which I would always be grateful to the organization, AIM and PU for having
internship as a mandatory course in MBA.

27
 BIBLIOGRAPHY

Annual Report (2068/69) CBIL. Kathmandu.

Bhole, L. (2003). Financial Institutions & Markets. New Delhi: Tata McGraw-Hill.

CIBL. (2012). Working Papers. In Operational Manual, Credit Policy & Guidelines,
Finance Bylaws, Employee Bylaws, Strategic Plan, Deposit and Credit Product
Papers and Audit Manual. Sarada Sadan, Kathmandu: Citizens Bank.

Gordon, E. a. (1999). Banking: Theory, Law and Practice. New Delhi: Himalayan
Publishing House.

http://debtrecovery.cardexpert.org/debt-recovery-management-credit-policy-and-
procedures.php. (n.d.). Retrieved 2013, from Credit Policy and Procedures.

http://www.encyclopediaofcredit.com/Credit-Department-Core-Activities. (n.d.).
Retrieved 2013, from Encyclopedia.

Kolb, R. W. (1996). Financial Institutions and Markets. Massachusetts, USA:

Blackwell Publisher.

NRB. (2013). NRB Directives 2070. Kathmandu Nepal.

www.ctznbank.com. (n.d.). Retrieved 2013, from Citizens Bank International Ltd.

28
APPENDIX

29
 The Format of Report Prepared By Internal Audit

Name of Branch : Kamladi

Name of Branch Manager : Mr. Name, (post)

Name of Auditors : Mr. Name, (post)

Date of Audit : 13.8.2012

Period of Audit : 29.3.2012 to 13.7.2012

SCOPE & OBJECTIVES

MANAGEMENT & STAFF

KEY FINANCIAL HIGHLIGHTS

(Rs. in ‘Mil’)
Particulars 16.07.2012 13.5.2012 Growth %
Total Deposits
Total loans and advances
Loan Loss Provision-NPL
Total Non-finded Business
Profit -
(Rs. in ‘Mil’)
Particulars Target for the Achieved as Target for the Achieved as
FY 2011/12 per GL as on FY 2012/13 per GL as on
Deposits
Advances
Profits

EXECUTIVE SUMMARY

AUDIT FINDING:

 Last Audit Compliance

1) COMMENTS PART - I

Those comments contained in this part are serious in nature and require the
immediate attention of the management.

2) COMMENTS PART - II
Comments contained in this part are of some routine nature and should be corrected
by the branch.
 Rectified Portion:

***End of report. ***

30
 Weekly Log Sheet

Student Name : Utsav Jung Bist

Organization : Citizens Bank International Ltd.

Instructions: Complete this form each day, filling in the date, and a brief description
of your accomplishments/tasks that day. Submit the form with the Final Internship
Report (Appendix).

Day Date Brief Description Challenges/Problems Knowledge

of Tasks & their solutions applied and
learned
Monday 30- I had an orientation It was difficult as first HRM, OB
Sep- program and meet to adjust in the working
13 with the members environment.
of the department.
Tuesday 1- A general idea It was difficult to The bank is a
Oct- about the understand the various more of an
13 organization was financial transaction intermediary in
known through done by the bank, later the financial
study of strategic an general idea was market
policy and plan of drawn of the
the bank organization
Wednesday 2- The NRB The NRB directives The directives
Oct- directives issued by gives a general gives a basic
13 the Central bank framework for the bank idea about
had to be to operate which financial
understood. addressed different reporting and
activities of the bank Portfolio
Management
Thursday 3- Went through the There were enormous The operational
Oct- different operation number of different manual and
13 Manual and manual and product product paper
Product Papers paper that was to be was the initial
developed by bank. read and selecting the working papers
appropriated and to be read.
important was difficult
to understand.
Friday 4- Tried to understand There were around 13 With patients
Oct- the operation done department, hence and good
13 by different knowing and understanding
departments like understanding the JD of among the staff
Remittance each department was all I came to know
Treasury, Finance messed up at first the function of
etc each
departments

31
2nd Week
Sunday 6- I tried to learn the The IT department of The bank used
Oct- software used by the branch was huge common SQL
13 the Bank and there was different server and
and vast manual of Pumori as
software banking, but I banking
focused on Banking software
Software.
Monday 7- I reviewed Job - I applied the
Oct- Description of the knowledge of
13 Audit Department HRM to
and its scopes intervene the
department’s
Job
Tuesday 8- Tried to figure out There were different The FIM
Oct- the financial jargons used which was subject was
13 figures of the Bank difficult to understand, helpful and also
and studied it. review of books helped the NRB
me a lot. directives
addressed the
reporting in
simple and
standard terms
Wednesday 9- I was involved in - -
Oct- Discussion of
13 various operational
risks that occured
lately in the
industry.
Thursday 10- I was given a task It needed patients and a Bank
Oct- to reconcile the vigorous concentration reconciliation is
13 Account Closing as accounts had to be a regular task.
Charge income tallied manually.
generated of Thaiti
branch
Friday Dashai Holiday Started

3rd Week
Sunday Dashai Holiday

Monday Dashai Holiday

Tuesday Dashai Holiday

Wednesday Dashai Holiday

32
Thursday 17- I learned to extract - -
Oct- and dump data
13 from the banking
software
Friday Purnima Holiday
4th Week
Sunday 20- I was given a task It needed patients and a Bank
Oct- to reconcile the vigorous concentration reconciliation is
13 ABBS income as accounts had to be a regular task.
statement of tallied manually.
Butwal and
Chitwan Branch.
Monday 21- A general idea The Bad Debit in the the accounting
Oct- about the LLP and financing sector was a was based on
13 NBA of the bank huge loss for the bank. Cash Basis
was given to me Hence Credit Risk rather than
where I studied the department was the Accrual Basis
various Bad Debt
in loan
Tuesday 22- I was given the I tested my skills in Microsoft
Oct- task to edit the total excel to edit and Office
13 amount of Specific process data understanding is
and General LLP. important for
any job
Wednesday 23- A report on LLP Reporting in a There are
Oct- and loan default standardized format standard norms
13 was to be made was difficult. for reporting
Thursday 24- The different types It was a challenging job The Credit
Oct- of loan deteriorated to standardized bad Recovery
13 loan was to be loan in four different Department is
reported categories that were the key
Pass, Substandard, department to
Doubtful and Bad. decrease the
deteriorated
loans
Friday 25- I was given the _ Proper
Oct- task to file and recording &
13 record the old filing saves time
reports properly to search
records
5th Week
Sunday 27- I was assigned to It was my first time in Prior working
Oct- audit Thaiti the audit hence I was before audit is
13 Branch. feeling nervous. important

33
Monday 28- The Thaiti branch I had to remember all _
Oct- Account Opening, the procedure in the
13 Closing, Balance manual and check the
Certificated Issued document which was
to all CSD related time consuming
works was audited
Tuesday 29- The KYC and I had to present on Risk I implement my
Oct- AML policy was grade and implement communication
13 tried to be proper KYC Due skills
implemented in the Diligence to the branch
branch staff
Wednesday 30- The remittance, I had to remember all _
Oct- Cash Department the procedure in the
13 and the manual and check the
administration document which was
department of the time consuming
branch was audited
Thursday 31- Loan files of the I had to remember all
Oct- Thaiti Branch was the procedure in the
13 audited credit guidelines /
credit product and
check the document
which was time
consuming
Friday 1- The uncollected _ Old documents
Nov- cheques of the consumed space
13 Thaiti branch was hence to control
destroyed risk is has to be
destroyed
6th Week
Sunday Tihar Holidays

Monday Tihar Holidays

Tuesday Tihar Holidays

Wednesday 6- The Koteshwor I had to remember all _

Nov- loan files were the procedure in the
13 audited credit guidelines /
credit product and
check the document
which was time
consuming
Thursday 7- The financial There were various Performance is
Nov- figures of account heads in the always
13 Koteshwor branch Profit and Loss account measured with
was dumped form like Non Funded the Budget
the banking account and accrued Figures

34
 Software and Interest Income,
releted to the actual Interest Suspense which
budget was difficult to
understand
Friday 8- The audit report of _ Report writing
Nov- koteshwor branch skill was
13 was drafted enhanced
7th Week
Sunday 10- The draft of The following of the Simple
Nov- koteshwor audit standardized format language and
13 was being prepared was difficult to adhere, good report
but I adhered to it. writing is very
important
Monday 11- The reply of The frequent Etiquette and
Nov- appropriate charges communication had to logical
13 not taken was be made with the Head reasoning are
being asked for of the Department and always praised
justification from Branches. in the
koteshwor organization
Tuesday 12- The rectification _ _
Nov- done on the loan
13 file of koteshwor
was followed up
Wednesday 13- The preparation for All finding was to be _
Nov- drafting Thait arranged appropriately
13 branch report was for writing report
done
Thursday 14- The financial There were various Performance is
Nov- figures of Thaiti account heads in the always
13 Branch was Profit and Loss account measured with
matched with the like Non Funded the Budget
budget figures and account and accrued Figures
noted, also follow Interest Income,
up on the Interest Suspense which
comments was was difficult to
done understand
Friday 15- There was a _ Discussion on a
Nov- discussion on the case gives a lot
13 finding and facts of insight and
broadens the
knowledge
8th Week
Sunday 17- The draft of Thaiti
Nov- branch was
13 finalized after
justifiable reply
from BM

35
Monday 18- The reporting of It was easy for me as I Supervisor is
Nov- job carried out was had prepared log format responsible for
13 done to the for my internship his/her staffs
supervisor job within the
department
Tuesday 19- The audit _ Performance
Nov- experience were Management of
13 discussed with the the staff is done
team member and by department
noted Heads
Wednesday 20- Card Audit report There were less report
Nov- was reviewed and present hence I
13 possible risk was coordinated with the
measured department for
generating report.
Thursday 21- Review on the IT IT audit had used The IT audit are
Nov- audit was done and various technical done by IT
13 possible risk Jargons which I hadn’t specialist
measure were come across earlier, but
reported later I consulted the IT
supervisors
Friday 22- Review on the HR The HRD audit
Nov- audit was done and scope was less
13 possible risk than I expected
measure were
reported
9th Week
Sunday 24- A coordination was The finance department LLP was a
Nov- done with the was the designated subject of
13 Finance department department to report the concern for the
to review LLP of LLP and CAR to NRB management.
the bank for 1st hence I consulted with
Qtr. the department.
Monday 25- The finalized LLP There was a long list in _
Nov- of the 1st quarter the excel which had to
13 was studied and be edited with
fragmented as to continuous system hang
general and when processing the
specific data, but I fragmented
the data and process it.
Tuesday 26- The financial report It was a challenge to The BOD was
Nov- to be submitted to present a well the sole body to
13 the Board was communicated report pass any
studied addressing to every amendments.
problems, figures and
facts.
Wednesday 27- The total Interest The bank had many The SQL

36
 Nov- Income and operational income and language was
13 Investment Income Interest Income that it effective for
were calculated earned, so I had to work generating
manual dumping on specific income required
the list form account head scrutinize. information
banking software
Thursday 28- The Interest The calculation of Interest
Nov- Suspense were interest was a done Suspense
13 manual reviewed where I reviewed the Account was a
appropriate formula for provisional
calculating Interest account of
Income and Reaming Interest Income
interest to be earned.
Friday 29- The total structure _ I learned to
Nov- of Deposit in work in Excel
13 different product sheet effeciently
were reviewed and
manually
calculated
Sunday 1- Reports for audit _ I became aware
Dec- reference for of the report as I
13 Bhaktapur branch had already
was prepared prepared two
different Branch
Report
Monday 2- The. Total account _ I became aware
Dec- heads and the total of the report as I
13 loan files and had already
Exceptional Loan prepared two
list were prepared different Branch
for the Bhaktapur Report
branch
Tuesday 3- The follow-up on _ I became aware
Dec- the KYC and AML of the report as I
13 of Bhaktapur had already
Branch was done prepared two
different Branch
Report
Wednesday 4- The CSD and _ I became aware
Dec- CASH department of the report as I
13 of Bhaktapur had already
Department was prepared two
done different Branch
Report
Thursday 5- The Remittance _ I became aware
Dec- and Administration of the report as I
13 Department of had already
Bhaktapur Branch prepared two
was done different Branch

37
 Report
Friday 6- The Loan Files of _ I became aware
Dec- Bhaktapur Branch of the report as I
13 was done had already
prepared two
different Branch
Report
10th Week
Sunday 8- The Bhaktapur _ I became aware
Dec- Branch Reviews of the report as I
13 and Comment were had already
Discussed with the prepared two
BM different Branch
Report
Monday 9- The Draft of _ I became aware
Dec- Bhaktapur Branch of the report as I
13 was prepared had already
prepared two
different Branch
Report
Tuesday 10- The Bhaktpur _ I became aware
Dec- Follow up on audit of the report as I
13 comment was had already
being made prepared two
different Branch
Report
Wednesday 11- The Charges and _ I became aware
Dec- Income for of the report as I
13 Bhanktapur was had already
reconciled prepared two
different Branch
Report
Thursday 12- The report of _ I became aware
Dec- Bhaktapur was of the report as I
13 finalized and was had already
sent for review by prepared two
the BM different Branch
Report
Friday 13- The Audit I became aware
Dec- Supervisor sent me of the report as I
13 to review the had already
selling of Bank prepared two
Assets through different Branch
bidding process Report
11th Week
Sunday 15- I was sent to attain I was unaware of the IT I learned that

38
 Dec- the workshop done workshop, but was there are
13 by the IT audit excited as I had the idea various IT
firms “IT sutra” earlier. Audit firms in
Nepal who does
IT audit for
Banks
Monday 16- I was asked to I had to present about I learned that
Dec- discuss on the my understanding of IT Penetration
13 learning of Audit audit that I learned in testing audit
of IT the workshop. I was done by
described the pro and few IT audit
cons of the IT audit Firms.
firms.
Tuesday Kirat Parwa

Wednesday 18- I was asked to I t was a challenged at The IAD staff at

Dec- discuss on my first but I had already the end would
13 finding about the started on my get idea of all
IAD Internship report hence the departments
it was easy for me to
discuss.
Thursday 19- I prepared the It was a challenge to I explored the
Dec- Internship report well explain about the working
13 Internship but I finally environment.
prepared and showed it
to my organization
supervisor
Friday 20- I gave a _ _
Dec- presentation on my
13 finding and
Recommendations
about IAD

Agency Supervisor’s Signature (Required) Date:

39